What You Need to Know Before Purchasing a Home

Buying your first home is an exciting and scary milestone; sometimes, the journey can feel overwhelming. With so many steps and financial decisions to consider, getting lost in the process is easy. But don't worry! P1FCU's VP of Mortgage Lending, Wes Gossage, joined the Making Sense of Money Podcast to break down everything you need to know to make your first home purchase a success.
 

Where Should First-Time Homebuyers Start?

Educating yourself on the process is the best place to start. Buying a home is one of the biggest financial commitments you'll ever make, so the more you know, the better prepared you'll be. "You can't learn enough. You can't ask enough questions. Getting a mortgage and that kind of commitment is a big decision," says Wes.

Many first-time buyers assume the mortgage process is similar to getting a car loan or a credit card, but it's far more in-depth. Be prepared for a longer and more detailed approval process, and don't hesitate to ask questions.

Start Your Homebuying Journey
  • Save up for a down payment and other costs
  • Research mortgage options and home loan programs
  • Check and monitor your credit score (Download your Credit Score Workbook to learn more)
  • Meet with a lender and make sure you know what you can afford and get pre-approved

The Financial Habits That Matter Most

Your financial well-being plays a massive role in getting approved for a mortgage. Here's what lenders focus on:

Employment Stability

Lenders want to see a steady work history before approving a loan. "If you've changed jobs, is it in the same industry? Same line of work? That can affect what we qualify you for, or how long you need to be in that job first," Wes explains.

Credit Score & Debt Management

"Credit is always important. How you manage your finances will have a huge impact on the types of loans, programs, and interest rates available to you," says Wes. Your credit score impacts the loan types, interest rates, and mortgage programs available to you.

To keep your credit in good shape:
  • Pay bills on time
  • Keep credit card balances low
  • Avoid taking on new debt before buying a home

Down Payment & Savings

"What you have to put down for a down payment can be sizable. You need to think about where you’re going to get it," Wes advises. You'll need more than a down payment, there are other costs include closing fees, inspections, and prepaid expenses.

Unexpected Costs That Can Surprise First-Time Buyers

Many first-time buyers focus only on the purchase price, but there are additional expenses to consider:

 

Real Estate Commissions

Traditionally, sellers covered commission fees, but some buyers now take on part of those costs.

Inspections & Appraisals

You may need additional tests, such as water quality or septic system inspections, in addition to the standard home inspection.

Closing Costs & Prepaid Expenses

These fees can add up quickly, so it's essential to budget for them ahead of time.

Common Mistakes to Avoid

Buying a home is exciting, but making smart financial choices is essential. Here are some common pitfalls to watch out for:

 
  • Skipping Pre-Approval – Before browsing homes online, talk to a lender to understand what you can afford.
  • Overlooking Hidden Costs – Repairs like a new roof or plumbing can be expensive. Get inspections and plan for future maintenance.
  • Making Big Financial Changes Before Closing – Avoid taking on new debt, switching jobs, or making large purchases (like furniture or a new car) before finalizing your loan.

What to Expect During the Closing Process

You're almost there! But before you get the keys, lenders will do one last financial check to ensure everything is in order. "We get you approved, but then we verify everything again before closing. If you've taken on a new car loan, changed jobs, or had a big financial shift, it could impact your loan," Wes explains.

Keep in Mind:
  • Maintain a steady job and income
  • Avoid taking on new debt
  • Ensure your finances match what was initially approved

Closing the Loan, Opening New Doors

Buying your first home is a big step, but preparation is key. From understanding mortgage requirements and financial habits to budgeting for unexpected expenses, first-time buyers should take time to educate themselves and plan ahead. Wes' biggest advice? Build an emergency fund because homeownership comes with unforeseen costs.

With the right knowledge and preparation, you can confidently navigate the homebuying process and make informed financial decisions.

 

Want more expert tips? Download our free Home Buyers Guide at p1fcu.org/homebuyersguide. If you have questions, you can also request to speak with a mortgage loan officer!